The ECB’s primary concern is to ensure stable prices. Unlike its European peer, it has the dual mandate of keeping inflation around 2% and aiming for full employment - an objective that can be aided by cutting rates to stimulate hiring. The Fed kept its key interest rate steady Wednesday but continued to signal three cuts later this year. The US labor market, meanwhile, remains resilient, with unemployment at historic lows and elevated wage inflation. Core inflation, which strips out volatile food and energy prices, was also revised upward to 2.4% on the Fed’s preferred measure. It’s a very different story in the United States, where the economy has, despite a turbulent few years marked by high inflation, gone absolutely gangbusters.įed officials now expect US gross domestic product to rise 2.1% this year, a sizeable jump from their 1.4% forecast in December. The recovery is nevertheless likely to be very subdued at first,” he wrote in a note. “The services PMI now gives some hope that the economy will return to growth in the spring. Manufacturing remains mired in a deep contraction, according to the latest PMI numbers.Ĭommenting on Thursday’s preliminary data, Christoph Weil, senior economist at Commerzbank, said the eurozone’s economy likely stagnated “at best” in the first quarter. Related article Key takeaways from the Fed’s rate decision and Powell’s press conferenceĮurope’s manufacturers have spent the best part of the past two years grappling with steep energy costs, which surged after Russia invaded Ukraine. Federal Reserve Chair Jerome Powell holds a press conference at the end of the two-day Federal Open Market Committee (FOMC) meeting at the Federal Reserve in Washington, DC, on March 20, 2024.
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